Legal ethics expert sees previous dysfunction in GM legal department

With recent questions raised by Sen. Claire McCaskill (D-Mo.) as to why General Motors’ general counsel Michael Millikin was not fired in response to the company’s handling of ignition system defects, her statement has led to comments from several attorneys.

Lester Brickman, a legal ethics expert at Cardozo Law School, where he also has been acting dean, said in a statement that it was “apparent” that GM’s legal department was “dysfunctional” under Thomas Gottschalk [general counsel at GM between 1994 and 2006, who is now of-counsel at Kirkland & Ellis] and “his successors as GM's GC.”

In a statement to InsideCounsel, Brickman pointed out Gottschalk “sent a memo to GM lawyers in 2003 instructing them to report any violation of federal, state or local law or regulation to their superiors and, if ignored, to their superior's superiors.”

“This appears more palaver than policy,” Brickman said.

“There was no centralized effort to determine whether there were recurrent safety issues raised by product liability lawsuits,” Brickman added. “Thus, if one lawyer saw a potential recurrent safety issue, the practice was not to share that with other GM lawyers. If the same safety problem was associated with other product liability cases represented by other GM lawyers, there was no one to connect the dots and see the pattern.”

Brickman said it is similar to how none of the U.S. law enforcement and intelligence agencies communicated with each other to connect the dots, which was “a critical shortcoming that was only detected after 9/11.”

“You have to attribute this critical failure at GM to the head counsel--the GC,” Brickman added.

When asked to comment on recent events, an attorney representing some plaintiffs in the GM case, Adam Levitt, a director at Grant & Eisenhofer P.A. and the head of that firm’s Consumer Practice Group, said, “While it’s clearly extraordinary for a senator to suggest steps that GM should be taking, by any estimation the GM key system defect problem and concomitant concealment is an extraordinary situation in almost every respect.”

“It is thus unsurprising that senators – demonstrating their ongoing and increasing frustration with GM’s double-talk and persistent efforts to cabin off or otherwise attempt to evade liability for the true scope of its wrongdoing – are demanding meaningful and decisive action,” Levitt said. “The Senate and the American public are entitled to more accountability from GM than that company is presently offering. They’re also entitled to know why GM believes it can recall millions more cars than were included in its initial recalls – with all subsequent recalls arising out of the same alleged key system defect underlying the initial recalls – yet refuse to accept responsibility for injuries resulting from accidents in those later-recalled cars, and continue to persist in its effort to avoid economic damages relating to all of the cars affected by the key system defect altogether.”

“Actions speak louder than words and, to now, GM’s been very good at the word game. It’s time for meaningful and comprehensive action for all recalled cars with the key system defect – both for personal injuries and economic losses,” he continued.

Last week, McCaskill blasted Millikin in statements she made during a Senate hearing. “In the aftermath of this report [undertaken for GM by Anton Valukas, a former U.S. Attorney], how in the world did Michael Millikin keep his job? I do not understand how the general counsel for a litigation department that had this massive failure of responsibility, how he would be allowed to continue in that important leadership role in this company,” McCaskill said during a commerce subcommittee on consumer protection hearing held on July 17. “The failure of this legal department is stunning.”

In his testimony to the Senators Millikin said, “I know we as a company, and I personally, have a responsibility to make sure this never happens again.”

“The investigation conducted by Anton Valukas revealed the failures behind the ignition switch recall, including those of the Legal Staff,” he added. “As general counsel, I am ultimately responsible for the legal affairs of the company.”

Millikin has worked for GM for 37 years, and prior to that worked as an Assistant United States Attorney.

“We had lawyers at GM who didn’t do their jobs; didn’t do what was expected of them. Those lawyers are no longer with the company,” he continued in the statement carried by InsideCounsel.

Steps were taken and will continue to be taken “to make sure something like this never happens again,” Millikin testified.